Politics: They rank among top earners, according to three decades worth of papers released by his presidential campaign. Charitable donations, municipal bonds helped reduce their levy.

WASHINGTON — Bob Dole and his wife, Elizabeth Hanford Dole, are millionaires with an annual income that is among the top fraction of earners, according to tax returns made public Friday.

The returns released by the Republican senator's presidential campaign also show that the Doles have substantially reduced their federal tax liability through charitable donations, investments in municipal bonds--and losses from a trust of Elizabeth Dole's.

Most of the Doles' charitable donations were derived from the income of Elizabeth Dole, the former Cabinet member who has taken a temporary leave of absence from leading the American Red Cross to campaign for her husband.

Disclosure of the Doles' tax returns comes at a time when one of his closest challengers for the GOP nomination, magazine publishing heir Steve Forbes, has declined to make public any of his returns.

To emphasize the difference with Forbes, Dole campaign spokesman Nelson Warfield said the release of three decades worth of tax information "is a challenge to every candidate--Republican and Democrat alike--to level with the American people."

Forbes still "has no interest in releasing his tax records," his press secretary, Gretchen Morgenson, told the Associated Press.

Elizabeth Dole's trust investment, which encompasses commercial real estate and land holdings, generated tax deductions of about $286,000 from 1987 to 1994. The Doles had not previously made public their income tax returns for those years.

However, the new records released on Friday do not include the tax returns for Elizabeth Dole's trust. An aide to Dole's campaign said he did not know if those returns would be made public.

"The Dole campaign does not have immediate access to those records and we will check with the trustee [of Elizabeth Dole's trust] to see what the status of those records is," the aide said.

The Doles' joint tax returns show that, including interest from municipal bonds, the couple made $596,908 in 1994 and paid federal taxes of $155,756. Taking into account their interest income from the tax-free bonds, the Doles paid 26% of their total gross income in taxes. Over the period of 1987-1993, the Doles paid a minimum of 10.7% of their earnings in federal income tax, and a maximum of 19%.

According to statistics compiled by the IRS, the Doles' annual income ranks within the top 1% of American taxpayers.

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In addition to Dole's salary as a senator, Elizabeth Dole in 1992, 1993 and 1994 earned a salary of about $200,000 as president of the American Red Cross. She also received speaking fees during those years, most of which she contributed to a Red Cross charity and to a retirement account. The Doles in 1994 gave 2% of their income to charity, but contributed 19% in 1993 and 39% in 1992.

The Doles' tax returns for 1992-1994 were reviewed for the Dole campaign by the accounting firm of Price Waterhouse, which described the federal income tax paid by the couple as "materially correct."

A Los Angeles Times analysis of the Dole returns show that under Forbes' flat-tax proposal, the Doles would have paid substantially less in federal taxes--a total of $76,391 less for the 1992-1994 period. Dole has criticized Forbes' plan, but has said that, in principle, he could support some form of a flat tax.

Dole's release of the tax returns--spanning 1966 to 1994--is the most detailed financial disclosure of the Republican candidates seeking the presidency. President Clinton and First Lady Hillary Rodham Clinton have previously made public their returns, dating back to 1977.

Another Republican candidate, former Tennessee Gov. Lamar Alexander, last year released 16 years of tax returns.

Texas Sen. Phil Gramm released his tax return for 1994 on Friday, showing that he and his wife, Wendy, had a combined income of $305,060 and paid taxes of $89,992. Their income came mainly from Gramm's Senate salary and his wife's director fees and economic-consulting business. Wendy Gramm is a former chairwoman of the Commodity Futures Trading Commission.

Details that emerge from the Doles' tax returns include that:

* Bob Dole collected $25,000 from an individual retirement account in 1994. The IRA distribution was made because, under federal law, payments commence once a beneficiary reaches 70.5 years of age. Dole, now 72, would be the oldest man elected to a first presidential term if he wins the election.

* The Doles' 1987 tax return was audited by the Internal Revenue Service. According to a note written by an IRS examiner, the Doles filed an amended return in the spring of 1990, paying an additional $697 plus interest. The Doles filed the amended return and payment "subsequent to selection for audit but prior to notifying the taxpayer of audit," according to IRS examiner Douglas W. O'Donnell's note.

* The Doles on Tuesday filed an amended return for 1994, paying additional tax of $99. According to the Price Waterhouse accountant employed by the campaign, Dole had made a contribution of $250 to a man in need of a bone-marrow transplant, and the donation was assumed to have gone to a tax-exempt foundation. When Price Waterhouse verified the group did not have tax-exempt status, the Doles decided to file the amended return.